Separately, investors are moving into gold ETFs in early 2012. Gold prices were rallying Tuesday as Federal Reserve Chairman Ben Bernanke testified before the Senate Budget Committee.
“SPDR Gold Shares (NYSEArca: GLD) rallied $922 million last month and iShares Gold Trust (NYSEArca: IAU) picked up $276 million. Together they account for more than 80% of January inflows to the commodities asset class. Prompted by inflationary fears and a search for diversification in the wake of the downturn, interest across the broad commodities space has increased substantially over the past several years,” Morningstar’s Bailin noted.
“Commodities have not been immune to the recent pervasive risk-on/risk-off investing sentiment, and correlations have increased substantially,” the analyst added. “Gold, it seems, has been the exception to this trend. As it stands, correlations of the shiny yellow metal to the broad equity space are near zero.”
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD.